Listed companies in the South East of England issued 27 profit warnings in the first half of 2025, the region’s lowest total for this period since 2021, according to the latest EY-Parthenon Profit Warnings Report.
In the second quarter of 2025, the region’s listed firms issued 11 warnings, five fewer than in Q1 and two fewer than in the same period last year.
Nationally, the number of profit warnings issued by UK-listed companies rose by 20% year-on-year to 59 in Q2, compared to 49 during the same period last year. Over the last 12 months, nearly a fifth (19%) of UK-listed businesses have issued at least one profit warning.
In the South East, warnings in the first half of 2025 were spread across several FTSE sectors, including industrial support services, software and computer services, technology hardware and equipment, and personal care, drug and grocery stores.
Gareth Anderson, office managing partner at EY in Reading, said: “Whilst falling profit warnings are encouraging for listed businesses in the region, challenges remain as demonstrated by the national increase in warnings year-on-year.
“The mixed performance in the total number of warnings in the first half of 2025 compared to recent years signals a potential stabilisation in the region’s economic landscape.
“However, the national increase in profit warnings year-on-year serves as a reminder that challenges persist across the UK.
“The mixed performance highlights that while some companies are successfully navigating their operational hurdles, others continue to face significant sector-specific pressures.
“The distribution of warnings across key sectors such as technology and consumer goods sectors illustrates the varied challenges that businesses are encountering.
“Looking ahead, it will be crucial for companies across the South East to maintain a proactive approach in addressing the underlying factors contributing to these warnings. Strategic flexibility will be crucial for sustaining growth and mitigating risks in a complex and dynamic economy.”
The leading factor behind profit warnings during the second quarter was policy change and geopolitical uncertainty, cited in nearly half (46%) of warnings. This marked a significant increase from just 4% in Q2 2024, and the highest percentage recorded for this cause in more than 25 years of EY’s analysis.
The proportion of profit warnings to cite contract and order cancellations or delays in Q2 remained at a record 40%. One in three warnings (34%) cited tariff-related impacts, including weaker demand, supply chain disruption and exchange-rate volatility.
Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy leader, added: “The latest profit warnings data reflects the scale of persistent uncertainty and how heavy it continues to weigh on UK businesses.
“While this uncertainty has been a recurring theme since mid-2024, it has intensified so far this year – driven largely by geopolitical tensions and policy shifts – compounding pressure on both earnings and forecasts.
“While the announcement of global tariffs has clearly played a part in amplifying uncertainty, they are just one factor among broader geopolitical and policy upheaval.
“These pressures are often interlinked and, combined, they are having a significant effect on companies’ confidence, decision-making and spending.
“Whether the rise in profit warnings is cyclical or structural remains to be seen, and we still expect earnings pressure to ebb and flow with the macroeconomic backdrop.
“As companies operate in a risk and forecasting environment that is challenging to navigate, they must adopt a measured, scenario-based approach that balances both agility and strategic clarity.”
